JPYZAR slides to lowest close since July 22nd
Japanese Yen/South African Rand (JPYZAR) Technical Analysis Report for Sep 17, 2020 | by Techniquant Editorial Team
Moving lower for the 5th day in a row, JPYZAR ended Thursday at 0.1543 edging lower 5 pips (-0.32%). Today's close at 0.1543 marks the lowest recorded closing price since July 22nd. Trading 20 pips higher after the open, the pair was unable to hold its gains as the bears took control ending the day below its opening price. Closing below Wednesday's low at 0.1546, the forex pair confirmed its breakout through the prior session low after trading up to 3 pips below it intraday.
Daily Candlestick Chart (JPYZAR as at Sep 17, 2020):
Thursday's trading range has been 27 pips (1.74%), that's slightly below the last trading month's daily average range of 29 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for JPYZAR.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. The last time this happened on September 9th, JPYZAR actually gained 1.92% on the following trading day.
Unable to break through the key technical resistance level at 0.1567 (R2), JPY/ZAR closed below it after spiking up to 0.1570 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. After having been unable to move lower than 0.1546 in the previous session, the currency found buyers again around the same price level today at 0.1543.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Trading close to July's low at 0.1527 we could see further downside momentum if potential sell stops at the level get triggered.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "5 Consecutive Lower Closes" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for JPY/ZAR. Out of 31 times, JPYZAR closed higher 48.39% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 64.52% with an average market move of 1.18%.